Speaking in the House of Commons on Tuesday, Mr Alexander announced that all public sector schemes would be career average schemes and that the pension age would match the state pension age.

He said: ‘In future, scheme pension ages will match the state pension age, future schemes will be on a career average basis, and all the agreements are within the cost ceiling I set in November, and will save the taxpayer tens of billions over the decades to come.’

Mr Alexander confirmed the government’s plans to improve the accrual rate for the NHS pension scheme from 1/60 to 1/54.

He said: ‘In health, we have agreed to a revised revaluation factor of CPI + 1.5%. This allows the accrual rate to be improved to 1/54th.’

The Fair Deal – which allows any NHS staff who are transfered to work for a non-NHS provider to retain their NHS pension – will be maintained, Mr Alexander said.

The government will also consider what ‘practical options’ are available to reform the terms of access to the NHS pension scheme for NHS staff who move to a non-NHS any qualified provider delivering NHS services, Mr Alexander said.

‘Replacing so-called bulk transfers of pensions with continued access to public sector schemes means that we continue to protect public service workers’ pensions, manage the risk to the taxpayer, and forge ahead with our ambitious plans on public sector reform,’ he said.

More detail on the final NHS pension scheme is expected from the DH in due course.

The BMA have said that they will consult with members over the government’s final offer in the January. A non-acceptance of the offer will mean a ballot on industrial action.

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